Answered step by step
Verified Expert Solution
Question
1 Approved Answer
asap Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $214,200 and the following
asap
Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $214,200 and the following divisional results. Division I II III IV $443.000 Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $254,000 204,000 69,800 $199,000 189,000 60,000 $(50,000) $501,000 301,000 57,000 $143,000 247,000 55,000 $ (19,800) $141,000 Analysis reveals the following percentages of variable costs in each division. I II IV 67 % 90 % 82 % 75 % Cost of goods sold Selling and administrative expenses 39 62 50 58 Discontinuance of any division would save 50% of the fixed costs and expenses for that division. Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued. (a) Your answer has been saved. See score details after the due date. Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Division 1 Division II Contribution margin $ 90098 $ -8300 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Contribution margin $ $ $ Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations $ $ $ What course of action do you recommend for each division? Division 1 Division II Divisions III IV Total Sales Variable costs Cost of goods sold Selling and administrative Total variable costs Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed costs Income (loss) from operationsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started